Brexit Bulletin: Too Little, Too Late?

(Bloomberg) --

What’s Happening? Uncertainty abounds as Brexit talks hang in limbo and the coronavirus threat grows.

British industry welcomed the U.K’s £30 billion ($39 billion) stimulus package to fight the impact of the coronavirus, but warned more needs to be done to help firms prepare for life outside the European Union.

“The necessary focus on coronavirus doesn’t mean other challenges have gone away,” said Jonathan Geldart, director general of the Institute of Directors, whose 30,000 members are drawn from U.K. boardrooms. “The costs of Brexit adjustment are still very real, but measures to help firms with the difficult task of preparing were notable by their absence.”

Brexit was barely mentioned in Wednesday’s budget speech, a point not lost on Adam Marshall, director general of the British Chambers of Commerce. The U.K. will need “to do more to support businesses as they navigate changes to trading arrangements and the end of the Brexit transition period,” he said.

In another warning, the Institute for Fiscal Studies said Chancellor of the Exchequer Rishi Sunak  may need to rethink his fiscal strategy if the economic fallout from the virus outbreak proves more severe than expected. Projected growth rates “are feeble and indicative of an economy that is not in a robust position for coping with shocks like the coronavirus,” IFS Director Paul Johnson told a briefing in London Thursday.

Plans to pour additional billions into infrastructure were “genuinely very big,” but day-to-day spending plans were less generous and leave little for areas other than health, schools, defense and overseas aid, Johnson said.

The fiscal concerns mirror more general fears that Prime Minister Boris Johnson’s strategy for tackling the coronavirus outbreak are too weak. Several key public figures criticized the U.K. response ahead of an announcement that the country is abandoning plans to contain the virus and will instead focus on delaying its spread.

Beyond Brexit

• The coronavirus can live in humans for up to 37 days, according to a study in medical journal the Lancet.
• The carnage in financial markets continued. Here’s the latest on a day of shocking declines for global stocks.
• Global turmoil convinced Vladimir Putin what the world needs now — more Vladimir Putin.

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Brexit in Brief

Streamlined Service | U.K. plans to streamline how financial-services firms are regulated, released after Wednesday’s budget speech, risk raising concern in Brussels that Brexit will allow London to reduce oversight of the industry.

All You Can Eat | Rishi Sunak’s lavish first budget sought to contain the impact of the coronavirus — and to kill off Labour for years, Therese Raphael writes for Bloomberg Opinion.

Talks Still On | Plans to hold another round of post-Brexit trade talks in London next week are still on course, but the U.K. is looking at a “contingency plan” 

Self-Isolation | Of course there will be a Brexit trade deal, Philip Stephens writes in the Financial Times — both the U.K. and EU have too much to lose from failure. The real story, he argues, is Johnson’s desire to expunge all traces of the EU from the public realm.

Want to keep up with Brexit?

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--With assistance from Kitty Donaldson.

To contact the editor responsible for this story: Adam Blenford at ablenford@bloomberg.net

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